The appointment of PD Vaghela as the new Chairman of the Telecom Regulatory Authority of India (TRAI) is happening when telecom sector is under a major transition phase. 5G is knocking at the doors, 2G will soon be phased out, the growth of data networks, the emergence of next-gen technologies like AI, ML, mixed reality, and the ongoing tariff war between operators make the job of TRAI head one of the most challenging among senior bureaucrats.
The 1986-batch Gujarat cadre IAS officer Vaghela, who is going to replace RS Sharma, will have a lot on his plate as soon as he takes charge. Even though the former TRAI chairman refused to relook into the 5G spectrum pricing (base price is Rs 492 crore per megahertz in 3500 MHz band), telcos can now hope that the new chairman can give some relief given that the state of the sector has changed completely post the Adjusted Gross Revenue (AGR) issue. Incumbent telcos like Vodafone Idea and Airtel, which were already reluctant to pay high price for 5G spectrum, have been severely impacted after the AGR judgment.
Even though TRAI has pending recommendations on a bunch of key issues, the suggestions on floor pricing for telecom services is going to be most prominent. For instance, last December, the regulator floated a consultation paper to decide whether there's a need for floor pricing or not. Except for the ceiling tariffs for national roaming, fixed rural telephony, mobile number portability charges, and some other charges, tariffs for all other service are under forbearance which essentially means that TRAI doesn't dictate tariffs for any telecom service, and telcos are free to fix tariffs. Though the cut-throat competition ensures that tariffs for all operators remain in the same range.
The regulator has received 51 comments from stakeholders including Airtel, Vodafone Idea, Reliance Jio, Competition Commission of India, NITI Aayog and others. Nearly all the telcos have supported floor pricing but with a twist. For instance, Jio has recommended that voice services should continue under the current forbearance system whereas data services should be brought under floor pricing. Airtel, on the other hand, has asked for a time-bound floor pricing system which migrates back to forbearance at the end of two years. Despite demand from the stakeholders, the regulator has been postponing its recommendations on the issue.
The other big issue for Vaghela to oversee is the planned scrapping of interconnect usage charges (IUC) by next January. IUC has been a burning issue in the sector for the past few years. The IUC charges, which are paid by one telco to another for facilitating calls on its network, have been brought down, over the years, to 6 paise a minute between mobile-to-mobile calls. IUC charges for all other categories of calls - mobile-to-landline, landline-to-mobile, landline-to-landline - are already zero. Last year, the TRAI gave a major relief to incumbents when it extended the deadline to scrap IUC charges. Incumbents believed that since the traffic was asymmetric - that is, more mobile calls are being made by Jio subscribers to other networks - scrapping of IUC charges would hurt them.
It's now believed that traffic has more or less become symmetric and there's consensus between all telcos to move towards Bill and Keep (BAK) system - as envisaged by TRAI years ago.
It's not an easy task for a regulator to keep everyone happy but having consensus of all major stakeholders on key policy issues could drive the telecom sector to new heights under Vaghela.